Now is as good a time as any, in this series on Launching a Consulting Business, to cover the topic of engaging a board of advisors.
It has been said that the loneliest person on earth is the company president (founder, CEO, etc.). An entrepreneur, starting one’s own business, is no different. While you hopefully have your spouse or significant other to bounce ideas off on a daily basis, you’ll need more guidance and insight than this to succeed in your own business.
It is suggested that an effective board of advisors consists of no more than 5-7 people, covering the following areas:
- Demonstrated success in business (in general)
- Someone who has previously launched, grown and managed their own business
- An objective person (or persons) who will “give it to you straight”, not just make you feel good by agreeing with everything you say
- Specific “professional” help you will most likely have to pay for:
- We often are our own worst critics. As such, marketing guidance and input will be crucial. If the above listed people do not have marketing expertise you may want to consider engaging a marketing consultant.
- CPA – You are going into business to deliver services / solve problems NOT to do your own books (unless you are a CPA)!
- Investment counselor – To help you setup your own retirement plan
- Legal-related to help you:
- Determine the appropriate business structure (along with your CPA)
- Create any contractual templates that you may require (for engaging employees and/or subcontractors)
- To review any contracts your client wishes you to execute
- Insurance-related to help you:
- Put in place the appropriate insurance coverage (professional liability, errors and omissions, worker’s comp, health and life)
- Bottom-line: Ensure you don’t have any blind spots or risks that could jeopardize your business or livelihood.
- Regardless of whether the board of advisor member is paid (for their time or services) or not, you’ll want a handful of people you can bring together on a frequent basis (at least monthly) as they serve as a sounding board with the expressed interest of ensuring YOUR SUCCESS!
The key theme here is two (or several) heads are better than one. As you share your evolving business plans with your Board of Advisors they will undoubtedly ask great questions and provide keen insight that will be invaluable to your success.
Note: for those advisors who aren’t paid you’ll want to make sure they receive some form of benefit for their time and effort. Otherwise, they will likely not continue to find the time to provide you ongoing guidance.
During the early stages of my business launch I worked with a number of people who would potentially perform as consultants on engagements I landed (which turned out to be the case for many). Others (CPA and Legal) were paid for their “professional” services.
To obtain additional insight on this topic you are encouraged to read the book “Think and Grow Rich” by Napoleon Hill. He referred to this concept as the “Master Mind Group.” More specifically, refer to chapter 10 “Power of the Master Mind.”